There is a Flip Side to Risk, The Side that Ignores It

Entrepreneurs are often described as risk takers. They are people who can deal with taking chances and the ups and downs that go along with it. But there is a flip side to risk, the side that ignores it completely. Having the confidence to follow through on something is half the battle. Many would be entrepreneurs sit on the side lines waiting to have everything shored up. The reason they do that is self doubt. It can be debilitating. It’s practically better to be clueless.

There is something called the Dunning-Kuger effect . Here’s the Wikipedia explanation of it:

The Dunning–Kruger effect is a cognitive bias in which “people reach erroneous conclusions and make unfortunate choices but their incompetence robs them of the metacognitive ability to realize it.” The unskilled therefore suffer from illusory superiority, rating their own ability as above average, much higher than it actually is, while the highly skilled underrate their abilities, suffering from illusory inferiority. This leads to the perverse situation in which less competent people rate their own ability higher than more competent people. It also explains why actual competence may weaken self-confidence: because competent individuals falsely assume that others have an equivalent understanding. “Thus, the miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others.”

“ In the modern world the stupid are cocksure while the intelligent are full of doubt.”  
— Bertrand Russell

 This is important because you want to be a good balance between these two extremes. Here’s a negative view point on it from Dunning in the NY Times :

… Cluelessness is
clearly the biggest circle, in that there is so much knowledge and
expertise that lies outside everybody’s personal cognitive event
horizon.  People can be clueless in a million different ways, even
though they are largely trying to get things right in an honest way.
Deficits in knowledge, or in information the world is giving them, just
leads people toward false beliefs and holes in their expertise.

That is not to dismiss or belittle self-deception.  A caveat to
begin:  The traditional academic definition of “self-deception” is
technical and a little stodgy.  It requires that, to self-deceive, a
person both know “X” and deceive himself or herself into believing
“not-X.”  But how can a person both believe and disbelieve “X” at the
same time?  This is for philosophers to argue about (and they have, for
centuries) and for experimental nerds like me to try to figure out how
to demonstrate decisively in the lab (so far, we haven’t).

But if we imbue self-deception with a looser definition, we have a
lot to talk about. Psychologists over the past 50 years have
demonstrated the sheer genius people have at convincing themselves of
congenial conclusions while denying the truth of inconvenient ones. 
You can call it self-deception, but it also goes by the names
rationalization, wishful thinking, defensive processing, self-delusion,
and motivated reasoning. There is a robust catalogue of strategies
people follow to believe what they want to, and we research
psychologists are hardly done describing the shape or the size of that
catalogue.  All this rationalization can lead people toward false
beliefs, or perhaps more commonly, to tenaciously hang on to false
beliefs they should really reconsider.

Denial, to a psychologist, is a somewhat knuckle-headed technique in
self-deception, and it is to merely deny the truth of something someone
does not want to confront.

We are in an age where data is becoming ever more helpful in seeing the world and making decisions. It’s important to snap out of this Venn diagram and sometimes it helps provide lift off.


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